At the start of a new year a lot of us get motivated to give our homes a good cleaning. It’s a way to clear the physical and mental clutter and, if you’re selling your home, it’s a must-do to help attract buyers.

According to HomeGain, cleaning up and de-cluttering can gain you thousands of dollars at the time of the sale and cost you as little as a few hundred dollars, if you use experts, to get the job done. Next week, I’ll explore other repair areas that result in the greatest return; but this week, it’s all about getting organized to increase the chances of selling your home.

I recently took on the task and unloaded about 25 trash bags worth of once-prized possessions. It’s funny how, as the years go by, time and lack of room can make you realize that those prized-possessions are just eating up space while serving little purpose. Most of us have more than we need. Having more stuff than you need in a home is not appealing to buyers. It can make them feel cramped, nervous, and overall uncomfortable in your home which may result in a lower offer.

The best approach to de-cluttering is to have an organized plan. Expert organizer Mary Pankiewicz of Clutter-Free & Organized suggests making a list of all the areas that need to be organized; otherwise you run the risk of giving up.

“What people do is they try to do too big of a project and then they get overwhelmed and then they get discouraged,” says Pankiewicz.

So, if you’re rolling up your sleeves and getting started, a good place to start de-cluttering is the hall closet. Why? Buyers are certain to open it up and check it out for space.

“The thing to remember, particularly with closets is, it doesn’t matter how big the closet is — if it looks crowded, the buyer still thinks it’s a small closet,” says Pankiewicz.

De-cluttering a home can be a huge task that can be made even more laborious if you’re not careful. “What people will want to do is haul everything out of that closet and then they don’t know what to do next because they’ve got too much stuff to deal with.”

She recommends a systematic approach to clearing clutter. Pankiewicz tells clients to first start with everything on the floor. Pull those items out and leave everything on shelves inside. Go through the items and get rid of the things that you don’t have a use for. “The golden question to ask is not ‘Will I ever use that?’ That’s what I call the keeper question because the answer to that [question] is ‘Who knows, maybe.’ So then I better keep it,” says Pankiewicz. She says the better question to ask is, “What will make me use this or what will make me need this?”

Pankiewicz says when that question is asked, often people realize that they’re never going to use the item and then are more willing to let it go.

Once you’ve found the stuff you’re ready to get rid of, what do you do with it? Many sellers attempt to store it until they can have a yard sale or they donate the items. If you donate your items, make sure you take a look at the book Money for Your Used Clothing by William R. Lewis, CPA. The book tells you what the IRS will let you take as a tax deduction in 2008 for various items.

“If it’s cluttered before the move, it’s chaos after,” says Pankiewicz. She adds, “The key mistake is people not making a decision before they pack things up.”

That can be a very costly mistake for sellers. “They put stuff in storage and they pay for it year after year and then when they finally look at it, it’s nothing they want,” says Pankiewicz.

“The sooner you get your house ready to sell, the better decisions you’ll make,” says Pankiewicz. She says if sellers wait until the last minute then they tend to hold on to things and pack them up in storage saying, “I’ll look at it later.” That’s how the clutter simply follows them from home to home.

Phoebe Chongchua

The Associated Press
updated 3:46 p.m. CT, Mon., Nov. 10, 2008

The housing market may have gone bust, but many homeowners are still living in a bubble.

Despite dismal housing headlines and reports showing falling prices nationwide, owners in some once-hot areas still believe their home is gaining value or at least holding its own. And by hanging onto too-high expectations, sellers are unwittingly keeping the market from finding a bottom.

Real estate professionals across the country are reporting difficulty convincing sellers the true market value of their homes.
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“It’s like pulling teeth in this market,” said Twyla Rist of Reece & Nichols Realtors in Kansas City, where prices are off between 7 percent and 15 percent. “Even with everything being said, you still have people that think my house is better than everybody else’s.”

A recent Coldwell Banker report showed that more than three-quarters of its real estate agents surveyed said most sellers have unrealistic initial listing prices for their homes.

Likewise, an unscientific study released last week by real-estate Web site Zillow.com found that half of homeowners polled think their home’s price has increased or stayed the same in the past year.

“We expected people to get a little more in touch with reality especially over the summer, because you couldn’t turn on the TV or read the newspapers without seeing that home prices are falling,” said Amy Bohutinsky, a spokeswoman for Zillow.com. “It was very surprising to see this kind of disconnect.”

In fact, the median sales price of an existing home dropped 9 percent to $191,600 in September from a year ago, according to the National Association of Realtors.

It took John Cicero and his wife an appraisal, some convincing by their real estate agent and some hard-to-swallow facts to get them to lower the $525,000 listing price on their five-bedroom home in Valrico, Fla. They closed two weeks ago for about $380,000.

“We didn’t really understand the severity of the market,” Cicero said. “We lost close to $100,000 in equity so we were walking away from real money.”

They built the stucco home four years ago for $380,000 and poured more than $80,000 into it, putting in hardwood floors, granite countertops, ceiling fans, blinds, drapes and a built-in surround-sound stereo system. They also expanded the deck by the pool, turning it into what Cicero called an “executive entertainment area.”

“You think you have this wonderful home and people will want to buy it,” he said, “but you’re wrong.”

Dan Ariely, a behavioral Economics professor at Duke University’s Fuqua School of Business and author of “Predictably Irrational,” said the “better-than-average” effect is at play. And knowing your next-door neighbors sold their house for $500,000 makes it even more imperative for a homeowner to top that price.

“We feel that we’re better than other people. We’re unique. We’re special,” he said. “It stands to reason that our houses are also special.”

The attachment to a house only intensifies the more a homeowner personalizes it, creating an extension of themselves.

“The moment we invest in something, we fall in love with it,” Ariely said, which applies to something as sentimental as children or as trivial as origami.

That puts real estate agents in a precarious position of pricing a house to sell, but not insulting the homeowner by recommending a lower asking price. To a homeowner, a low, but realistic, listing price is “like someone calling your kids ugly,” Ariely said with a laugh.

Nancy Batchelor, a real estate agent at Esslinger Woooten & Maxwell Realtors in Miami, says she usually agrees to list the owner’s asking price as long as they can reevaluate the price in 30 days if the house doesn’t sell.

“I would like to believe their house is different, but I also don’t want to do them a disservice,” Batchelor said.

Joni Herndon, an appraiser in Tampa, Fla., said real estate agents are calling her in to help homeowners grasp the reality of their home’s value. Herndon frequently fields questions from disappointed homeowners after an appraisal, and has to explain how broadly the market is declining and why what a neighbor got two months before for his house doesn’t apply anymore.
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“But sometimes you just can’t get through to people,” she said.

She said homeowners who bought newly built homes at the height of the boom are the most stubborn because they’re trying to get back every penny they spent on customized changes.

One homeowner Herndon did an appraisal for refused to lower her listing price for the third time, insisting that such features like a raised roof and more space between two windows in an upstairs bonus room set her house apart from others just like it.

“It’s the mine is better than yours mentality,” Herndon said.

The homeowner originally asked the builder to move the windows another foot apart and raise the roof by 12 inches so the wall could fit her big-screen television. She also spent $15,000 in extra landscaping and exterior lighting, and $2,900 on designer fans, Herndon said.

“You could have put $1,000 worth of fans in the house and blown just as much air,” Herndon said. “Owners are very concerned about how much they paid for particular changes, but buyers out there don’t value them.”

Herndon appraised the house, also in Valrico, Fla., at $430,000. The seller put it on the market in April at $500,000, and cut the asking price to $469,5000 in July. The home is still on the market, and the seller declined to be interviewed.

The market would bottom out sooner if sellers weren’t so stubborn and didn’t keep prices artificially high, Arielly said.

Homeowners can’t stand taking a loss on their properties, yet keeping their home on the market at an inflated price could wind up costing them more. Homeowners need to look at the larger financial picture, Ariely said, and determine how much there is to gain or lose by keeping a home on the sales block longer.

Real estate agents press this point on their clients, saying no one wants to buy the most expensive house on the block. After the first reduction in listing price, a psychological barrier, subsequent cuts come easier, most agents say.

“Like any type of loss, there’s a grieving process,” Batchelor said. “First, they’re in denial, then angry, then depressed and hopeless. But then they eventually move on if they want to sell it.”

Read more about this topic at http://www.msnbc.msn.com/id/27648884/

Looking to sell your home? Placing well by these guidelines can help you improve your home’s appeal and even help it to sell faster!

1. Curb Appeal
Stand across the street…How does your home look? How does it compare to other homes nearby?

2. Comparative Value
How does your home’s value compare to the others on the market today?

3. Challenges
What obstacles does your home have that may influence the sale of your home?

4. Condition
Newer? Older? Updated? Outdated?

5. Charm
Is there warmth, character & decor that appeals to the masses?